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Centre for Innovation and Development

Centre for Innovation and Development. Wayne Leech Head of CID ANZ. Topics. Background Animal Health Industry Bomac Bayer The Acquisition Process The Integration Where to from here. Bomac – NZ Animal Health Company Consumed by Bayer – German MNE And survived!!. Bomac

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Centre for Innovation and Development

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  1. Centre for Innovation and Development Wayne Leech Head of CID ANZ

  2. Topics Background Animal Health Industry Bomac Bayer The Acquisition Process The Integration Where to from here

  3. Bomac – NZ Animal Health Company Consumed by Bayer – German MNE And survived!!

  4. Bomac Private NZ Bayer German Corporate

  5. Bomac – No 1 in NZ, 2 in AU, 70 export markets 300 staff, fully integrated Manufacturing, S&M, R&D, Admin No cash Heavily courted, PE, PF, TS Bayer persistency became attractive Ok let process begin…..

  6. Animal Health Market $20B Twist existing compounds FAP CAP Regulatory Environment Business Science interface Create value in all ways

  7. Why Bomac – • Fast, decisive, flat Org • Innovative, creative, connected • Track Record, growth achieved (products and sales) • Full service • 140 patents • Swot pioneer and improve, no copies • Very close to market, have to be

  8. Portfolio Approach • Solution provider • Pregnancy • Anthelmintic • Wounds • R&D Approach • Target animals • Mice models • R - Universities • D - Internal

  9. Auckland University Projects Blood Milk Barrier Conception rates Cell delivery

  10. Bayer – Science for a Better Life Revenue 58,000,000,000 (NZ 194,000,000,000) BHC 27,700,000,000 (Fonterra 19,000,000,000) AH 1,900,000,000 R&D 5,100,000,000 People 118,000 Scientists 12,000 Process oriented Directives, Circulars, Guidelines, SOP’s Accurate, precise, measured, perfect Major decisions and strategy from far above Ruthless, financial drivers for output

  11. CID PS M&S

  12. Bayer – Science for a Better Life Design parameters for NME incremental change, no commercial value step change, regulatory barriers Twisted generics, milk life from old NME gap left by poor LCM or refining API’s But they are Germans Own TLA language Punctual, want in writing, no glam, deliver on promises Time crucial, accurate, clean shoes, 1 month notice for appt Predictable, when you know how to predict!

  13. The Acquisition Process • Courting • Dating • Relationship building • Key Decision Point • Information Memorandum • Offers • DD • Binding Offer • Completion, settled 6 Jan 2011

  14. The Acquisition Process Bayer - delighted with speed and efficiency of a fast close Ex Bomac / MacQ - longest, slowest, tedious, most inefficient process ever! Welcome to German Corporate world!

  15. Integration time! Press releases, legal, financial, restructuring in background Staff secured Upgrades announced Integration process laid out 6 months to reach one face to customer 12 months for Bomac to disappear Few staff lost, either by plan or attrition Sales substantially maintained Did the zipper jam?

  16. Of course!! Remember the different organisational strengths Remember the corporate cultural differences Remember the country cultural differences Remember the time zone difference Remember the operational standards differences But miraculously it is coming together

  17. M&S now operating like a Bomac team (dominant) PS heavily corporatized, GMP SOP’s Global Compliance CID has maintained its autonomy while capturing a doubling of budget more new products to more countries, faster we are in a hurry to get products to market but not reckless either as we/market always insist on good Science Mutual influence has been very healthy for CID Infrastructure, approach, centring concepts Global support on tap not on top! CID ANZ firmly established as only 3rd Bayer R&D Hub

  18. The Lessons Is there a time to hand over, yes Market driven science is all that matters Get your project in the strategic plan of the potential acquirer It will take forever, include incubation time – don’t rush it or you will chase them away Not invented here is very strong in Global R&D groups How big a potential do you really need to chase? Is global domination of a little market as good/better than chasing a star without your feet on the ground. Bayer moved smartly to understand how other parts of the market work and have listened, sometime by insistence You can shift the momentum, bit by bit.

  19. The Learnings Was it all worth it? Bomac had out grown its infrastructure and was starting to creak R&D and Regulatory costs were ever increasing Market entry costs becoming higher Hard for privately funded coy to grow through the next level Merging 2 diverse cultures requires the presupposition of mutual respect Integration needs time and resources and cannot be rushed where significant thought process changes are needed Good science is stronger than the owner

  20. Thank you!

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